The olfactory system is an ideal model for studying mechanisms that regulate cell diversity during development. Mature olfactory sensory neurons (OSNs) are derived from multipotent progenitors in the basal olfactory epithelium (OE). The globose basal cell (GBC) is the earliest known cell type in the OSN lineage, and in adult regeneration models, gives rise to several other olfactory cell types. Molecular mechanisms regulating GBC multipotency are unclear, but there is strong evidence that the Notch signaling pathway is important. We show here that Notch1 is expressed in the E11 mouse OE in a subset of cells in the dorsal epithelium that appear to be GBCs. Neural precursors interspersed in this same region express the Notch ligand Delta1, identifying a potential role for lateral inhibition in progenitor cell fate. Lunatic Fringe (LFng), a glycosyltransferase that differentially modulates Notch1 activation to different ligands, is coexpressed in Notch1 + basal cells. The domain of Notch1 and LFng expression coincides with the region where ensheathing glial precursors exit the epithelium during their embryonic migration towards the presumptive olfactory bulb. In LFng reporter mice, beta-galactosidase labeled OSNs and presumptive migratory gila are both evident, supporting a potential basal cell origin for ensheathing cell precursors. We hypothesize that Notch1 activation instructively promotes glial ensheathing cell identity. In this proposal, we will investigate the role of Notch1 in determining GBC cell fate, and how this is influenced by LFng glycosylation. Specifically, we will: 1) define the identity of Notch1-expressing basal cells in the embryonic OE using established cell markers, and determine the effects of Delta ligands on enriched GBC populations isolated by FACS; 2) use LFng/LacZ mice to examine GBC lineage in vivo, and the effects of LFng loss on isolated Notch1+ GBC responses to Delta ligands. The results obtained from these preliminary studies will provide important information on the mechanisms which regulate cell diversity in the olfactory system, and potentially other neurogenic tissues.